Incoterms are standard trade definitions most commonly used in international sales contracts. Devised and published by the International Chamber of Commerce, they are at the heart of world trade.
Among the best known Incoterms are EXW (Ex Works), FOB (Free on Board), CIF (Cost, Insurance and Freight), DDP (Delivered Duty paid), and CPT (Carriage paid to).
ICC introduced the first version of Incoterms - short for "International Commercial Terms" - in 1936. Since then, ICC expert lawyers and trade practitioners have updated them six times to keep pace with the development of international trade.
Most contracts made after 1 January 2011 will refer to the latest edition of Incoterms, which came into force on that date. The correct reference is to "Incoterms 2010". Unless the parties decide otherwise, earlier versions of Incoterms - like Incoterms 2000 - are still binding if incorporated in contracts that are unfulfilled and date from before 1 January 2011.
Versions of Incoterms preceding the 2010 edition may still be incorporated into future contracts if the parties so agree. However, this is course is not recommended because the latest version is designed to bring Incoterms into line with the latest developments in commercial practice.